 The solution to climate change has to go through removing gigaton of CO2 that are already in the atmosphere. We clearly overshot. Now we have to not just reduce what we emit, but remove what we have already emitted. We need to remove gigatons of CO2. A gigaton is 2 billion with B.S. and B.O.I. tons of CO2. An activity of this level requires a lot of coordination and a lot of resources to say the least. Graciela Cicilniski. I am currently a professor of economics and mathematics at Columbia University and the CEO and co-founder of Global Thermostat. I was the creator of the carbon market that is the first time there is an international agreement ever based on the creation of a new type of market, a market for trading global public goods. I believe those are the markets of the future. We need to first of all limit emissions and then we need to change values so that we care for what matters. First of all, survival. To survive you need to breathe clean air, to drink water and to eat food. Both the air, the water and the food are all being destroyed by the human species, clean air, etc. So we need to change our values. Those extremely important survival areas, food, water, air, we need them for survival. They have no economic value, no value. So by that I mean that you can destroy all the trees in the United States tomorrow morning and make toilet paper. And since toilet paper has a market value, the economy improves. In the process of destroying our ability to clean the atmosphere. So the same thing is true about clean water and the same thing is true about food availability. So we are going head on into producing for economic progress what will destroy our ability to survive. And that seems crazy, but it's true. So the key thing of the carbon market was to change the system of values which markets define. And you do it by coincidentally limiting emissions of CO2 which is exactly what's needed to prevent, at that point, climate change. That was 1997. Fast forward. The carbon market of the Kyoto Protocol that I designed and I wrote into the protocol and I helped negotiate that became the centerpiece of Kyoto. Became international law in 2005. The purpose explicitly was to decrease the global emissions by about 20% by the period of time that was decided. The period of time ended 2020. Did we succeed? Yes, we succeeded. And this is a shock for most people to hear. Because in the year 2020 became widely known that the European Union emission trading system which is the carbon market of the Kyoto Protocol and which encompasses 27 nations, 450 million people, and was the embodiment of the carbon market that I wrote in 1997 and became law in 2005 and still there. Well, that market did decrease by 20, even above 20%, the emissions of all the nations in that market in the European Union. So it succeeded. It did exactly what it was meant to do and it's now accepted. So if we had, instead of just doing this at the European Union than this globally, we would have solved climate change. So we did solve climate change. We did. But it was in a subset of humankind, a substantial subset, because the European Union is huge. And it's now larger, over 30% of humankind uses carbon markets now. And so that was a very fortunate and very precise thing to do. It reduced global emissions. It succeeded to do so in the time scale that was expected for the nations that adopted it in the European Union emission trading system. And it gave a new type of economics, an economics in which there is values. There are market values for the global public goods of clean air, clean water and food. So it was an enormous success. And right now, even in Chicago, there are some colleagues that are proposing solutions to climate change based on the carbon market. They call it carbon credits, which is fine. The carbon credits now are changing the value system. They mean that clean is better, more valuable, and that dirty is less valuable. In fact, it's a burden. And using the valuable property of markets, the carbon market did succeed. And this is accepted widely now. For example, you can look at Physics Today, which is a magazine read by physicists all over the world. In December 2019, they had an article on this topic of the carbon market. And they said what I told you, that the carbon market had succeeded from 2005 to 2020, 15 years to drop emissions, as it was intended to do, by 20% below the 2005 level. If that had happened globally, we wouldn't be talking about climate change anymore. So all we have to do now is to extend that, to look at that model that was established and was successful for a policy, a market-based policy, an innovative form of economics, because it's valuing global public goods, which we usually don't value, and develop markets for that. So we have a solution. The problem is that for all this period, the nations that did not accept the carbon market continue increasing emissions. And so now it's not sufficient to lower emissions by 20% of the base year. Now we have to remove that legacy carbon that we emitted. So in the carbon market, the carbon credits give you a value for reducing emissions. Interestingly enough, the European Union emission trading system last week defined a new type of carbon credit that measure and compensate for the removal of carbon, which is already in the atmosphere, not just the reduction of emissions, but the removal. So we have the tools. It's possible to do it. I was the United States lead author in the IPCC in the year in which the IPCC was awarded the Nobel Prize with Al Gore. The IPCC is the scientific authority globally. It's made of scientists from all over the world, and what they say counts. And now they are saying in a report published in the year 2018 that it doesn't suffice anymore to reduce emissions or to limit emissions. Now we have to actually physically remove the CO2, which I call the legacy CO2, that is already in the atmosphere. And that is necessary now, insufficient as it turns out, because we now have the right technologies. In addition to the IPCC, the United States National Academy of Sciences also published a report the same year, 2018, saying what I told you. So I'm not telling you anything new or anything that is unique to me. This is well known. I mean, we are not living in a government dictatorship that can move enormous amount of money and make decisions in this direction, unless there is also an understanding of what we're doing and why we're doing it. The perfect example is what happened with the pandemic and the issue of vaccines. It took trillions of dollars. And yes, the government can do that. But it will be defeated in the case of carbon emissions. If the government was doing this and the private sector was continuing to emit, so you would need to reduce emissions and you need to remove the CO2 that is already there. So you will say, what do you need? The government or the private sector? And I will say that's a stupid question. I mean, why limit yourself like that? What do you mean? Is it private or public? Hey, don't have time for that, okay? Every possible way, both, okay? So the use of market has a private flavor to it. But the market of the Kyoto Protocol, for example, was created with 160 nations putting limits on what they could emit. Otherwise, there is no market without those limits. You need the government for certain purposes. The government, to a certain extent, is going to give guidelines of where we're trying to go. Does the market give guidelines? No. The market doesn't tell you, it doesn't tell you you want to go to the beach or you want to go to the mountain. It's a car. It's like a car. It takes you there. It's very efficient to go there, but it doesn't tell you where you want to go. So in a way, governments are social organizations based on voting in democracies and they will tell you where we want to go. So the government of the 160 nations voted they wanted to reduce emissions. But then how do you get there can be much better than by the private sector and markets are very important for that. And the same thing is true now. So you need both support from the government and you need a private activity and everybody to be involved. Let me give you an example. If you look at the success or the relative success of the housing market in the world, if you look at the government of Margaret Thatcher, which was a conservative government, what they did is they saw that there is a financial instrument, which is the mortgage that was invented so by backing up the loan with the asset, which is the house, they created an instrument that people have access to and it really had a huge effect on the availability of housing, which is very important for human welfare. And that was a conservative government. What happened after that in many places is the creation of institutions in which the government was buying some of the mortgages from the banks and Freddie Mac, Ginny May. So while the trading is private through markets, the government can participate in markets and create more liquidity. That was the purpose of those institutions. You can do the same here. I'm not saying Freddie Mac or Ginny May. I'm saying the government can create liquidity and the instruments that are needed for people to remove CO2. They are called off-takes. Instead of developing the mortgage market, my proposal is to develop the off-take markets, the off-takes instead of providing loans that are based on houses as the asset, like mortgages. You can do the same thing with off-takes. And then the result of that is providing enormous ability for people to participate in the market, bring a lot of liquidity and remove CO2. How would that work? You need investment so those projects can produce all the CO2 and sell it, people making money. The same way that people can make money from purchasing homes from the uses of mortgage, every person or every firm in the world who buys CO2 uses an instrument called an off-take to do so. I didn't invent that. This is a fact. So what we need is that type of market, the market for offsets to be a moving market, like Margaret Thatcher made a market for mortgages, a moving market. And that market is a private market and the mortgage back securities were super duper private and involved trillions, as you know. But it uses liquidity that the government can create. So everything I'm telling you shows that there is a fantastic business opportunity here, which is similar to the mortgages and mortgage back securities from the point of view of finance, liquidity and human needs. But instead of being the human needs of a home, which is an important human need, human needs of a clean and stable climate, clean atmosphere, stable climate. And that human need is to resolve climate change. It can be done. And we do have the technology to do this. Is it perfect? No, it's not perfect. It's getting cheaper and better all the time. And it removes CO2 directly from air. The question is how to bring resources so that can happen. We can decrease emissions, which is a must. And at the same time, reduce what's already there in the atmosphere now. So the way to do that is through these off-takes markets that I explained, and it works like this. Every nation in the 160 nations in the Kyoto Protocol commits to a limit on emissions. Those nations that go above their limit have to buy permits or credits from those that are below. So the ones that are over-emitting have to pay. The ones that are under-emitting, this way the under-emitters get richer because they are cleaner and the over-emitters have to pay them because they are producing a public bad. Out of that emerges the price and that's the carbon market. That's it. And that's what I actually wrote in December 1997 at the request of the European Union in the creation of the carbon market. But now what you need to do is something different. Because that was started from every country having a limit on what they could emit. And then if they go above, they have to pay. If they are below, they can't be paid. It's not anymore the point of limiting emissions. Now we have to remove emissions. So that means that every nation will be given as part of the agreement the amount of CO2 reduction they are willing to do. And if they commit to those, using the same concept of the carbon market, but not for reduction, for removal will solve the problem. Now you will say, well, that sounds very nice, but who is going to agree to do that? No country will agree to do that, right? Because they will have to pay enormously unless they remove the carbon from the atmosphere. So my article in Time Magazine offers a solution to that. Instead of asking 195 nations to agree to remove CO2, and I told you we had to remove gigatons, how many? Then 20 gigatons in the next 10 years, okay? Or every year. So how do we achieve that? And you get countries to agree not to remove CO2, but to remove CO2 provided that they have the technology to do so profitably. So it is a conditional. It's like, let's say the United States won't have to remove 10 gigatons. It will have to remove 10 gigatons provided that it has the technology to remove it and make money in the process. If it doesn't have the technology, it doesn't have to do it. This way you can achieve every nation in the world to agree to that. The developing nations not only should have the technology to be able to do it profitably, but they should have the funding to do that. So if they have the funding and they have the technology to do this profitably, they promise to do it. Well, what happens is once you have 195 nations all agreeing to that, if you have the technology and having the funding to do it, then it locks in because the technology exists. And all we have to do is get the money. And the money is not for spending it. The money is to make money. It's investment for profitable operations. So this is the solution and that's what we should be doing right now at the international level. And if you say, well, let's not be so demanding, let's do it first at home, I say to you, yes, by all means, everything you can do is useful, but you can't do it at home because this is a global problem. And if the United States decreases its emissions by 50, 70, 80 percent, but Africa keeps on burning its coal, we still have climate change because it's a global issue. And the atmosphere concentration of CO2 is a global public good, it's the same everywhere. So you need to have, whether you like it or not, you need to have a global agreement. And the agreement I told you will do the job because we do have a technology that is profitable in the production and sale of CO2. So that's where the funding and the creation of these securities, which are like mortgages that bring money to invest in this area, is critical to the solution of this problem.